UK tech has enjoyed an upward trajectory… But perhaps not for much longer
When it comes to innovative technology, the UK has flourished. London is an increasingly desirable location for tech startups, keeping pace with and even overtaking many of its European counterparts. Between 2013 and 2017, the UK experienced the highest numberof professional, scientific and tech startup registrations in Europe – around 70,000 more than France. As well as offering high quality, home grown tech, the UK is also attracting international organisations. What factors have contributed to the country’s success, and is the growth sustainable?
Dressed for tech success
The UK’s bustling tech scenecan be partly attributed to the quality of education and research that takes place at its various universities. Students from across the globe flock to study at UK schools and universities, contributing to an extensive talent pool that in turn fosters promising companies. Particular progress has been made in AI, motivated of course by the expected economic benefits. This April, the government announced its AI Sector Deal – a £1bn pledge supported by 50 leading organisationsto fast track artificial intelligence projects. Global AI experts NVIDIAhave set up their Inception virtual incubator programme in the UK, and Japanese venture capital firm Global Brainplans to establish its European headquarters in the country.
So far, so good… But what the UK is not so great at, however, is turning this talent into large, internationally successful businesses. In fact, in this respect, the whole of Europe lags behind other parts of the world. In 2015, early stage European tech companies raised $13.4bnin funding. Their US equivalents raised the same amount in the last three months of the year. It comes as no surprise that Europe is home to fewer tech unicorns than Asia or the US. Now that the startup craze appears to be cooling off, the silver lining for Europe is that the US will have further to fall.
The B word
Although the UK has been successful in attracting funding and interest from overseas, uncertainty over the country’s relationship with Europe could throw a spanner in the works. Chancellor Philip Hammond’s suggestion that the UK is prepared to ‘go it alone’when taxing tech companies is a stark reminder of the ongoing tensions that underlie international negotiations. While the UK has undoubtedly benefitted from European capital and support, Europe loses many of its startups when they reach a certain level of growth. In other words, Europe is thought of as a great place to birth a startup, but not to bring one up. Politics has a role to play, too. The migrant crisis has the potential to place strain on European economies, discouraging venture capitalists from making big investments. The biggest question mark hangs over funding… If and when European support stops, will the UK be able to hold its own in international investment markets?
Sustaining technological growth
Things seem to be going well for the UK tech scene, spearheaded by a vibrant tech hub in the capital and strong international renown. However, in order to maintain this position, the UK will need to encourage technological development at all levels. This means increased governmental attention, and a continuation of the precedent it has set in its 2010 Tech City policyand more recent initiatives like the AI Sector Deal. Hopefully, this will maintain the UK’s image as a healthy environment for technological development, and maintain the interest of overseas talent and investors.
In the shadow of political and economic tumult, the UK tech scene has a number of challenges to overcome if it wants to keep – and strengthen – its technological gains. While London has played a vital role in the country’s upward trajectory, it’s high time to look beyond the south to unlock talent across all regions…
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